LoKT Telecom/Internet Law Blog

9.28.07 Congress and Federal Activity Update

FTC Wants Authority to Address Deceptive Practices in Telecom Industry: In a Senate Commerce Committee subcommittee hearing, FTC Chairwoman Deborah Platt Majoras asked that the FTC be given greater power to police unfair and deceptive practices in the telecommunications industry. Now, the FCC maintains regulatory responsibility for acts by common carriers. Legislation would be required to grant the FTC such oversight.

Farm Bill May Contain Telecom Funds: The Senate Agriculture Committee is marking up a five year farm bill that could contain some benefits for rural broadband providers. The discussion draft currently circulating contains a provision authorizing $25 million to the Agriculture Department for a broadband loan program. The bill also would create a national center focused on extending broadband to rural areas. The center would work with existing local development offices and would be required to provide annual updates on the broadband loan program's effectiveness.

More Money for Rural Broadband Studies Proposed: Rep. Zack Space (D-Ohio) proposed a bill (HR-3627) allocating $40 million in grants to encourage broadband deployment. The money would be used to fund studies to determine areas of a state lacking broadband and identify potential providers. The money would not, however, be available to subsidize providers.

Bush Administration in Favor of Permanent Internet Access Tax Moratorium: The Bush Administration again made clear its support for making the Internet tax moratorium permanent. S-1453 was in the process of being marked up while amendments circulated and competed for votes. The bill was pulled on the 27th when it appeared that Republicans had enough votes to make the ban permanent. A middle ground may be the best either side of the debate can hope for resulting in a temporary extension. Senator Kerry (D-Mass.) has proposed a six year ban, which would be the longest ban ever approved by Congress.

House Telecom Subcommittee Hearing: The House Telecom Subcommittee Hearing will have a hearing on Tuesday, October 2nd. Among topics to be discussed are: the special access market; municipal service providers; and copper lop retirement.

9.24.07 FCC Update

FCC Opens Rulemaking on 2155-2175 MHz Band: The FCC opened a notice of proposed rulemaking regarding the 2155-2175 MHz chunk of spectrum. This follows the FCC's decision to reject proposals by M2Z Networks and others to grant a single nationwide license for public/private partnership. The FCC requests comment on ways to address interference concerns if both mobile and base transmissions are to be allowed in the band, including the use of power limits and out-of-band emissions requirements. The FCC also asks for input on any other technological approaches that could be employed in this band. The NPRM seeks comment on whether to auction the spectrum, authorize unlicensed use of the spectrum, or adopt some other alternative licensing approach. The Commission also seeks comment on licensing and operational rules for this spectrum, including the appropriate block size and geographic area size to be used for licensing the spectrum, whether to license the spectrum under the FCC’s flexible, market-oriented Part 27 rules, and whether to auction the licenses in a simplified subset of alternative band plans.

CLECs Request Changes to Forbearance Rules: Five CLECs asked the FCC to revise the rules for ILEC forbearance requests. The CLECs argues that current rules did not allow enough transparency into the process or time to provide opposition to the request. The petition also asks that the FCC issue actual orders even when forbearance petitions go into effect due to FCC inaction, such as occurred last year with Verizon's broadband forbearance petition.

USF Changes to be Proposed in November:
The USF Joint Board expects to issue proposals to change the system, even including limited eligibility for broadband and wireless.

Intercarrier Compensation Still Dragging: As intercarrier compensation reform continues not to happen, some are suggesting that at least two areas will be addressed before the 2008 election cycle heats up. The FCC will likely issue rules on "phantom traffic" and could change USF contributions to be based on telephone numbers. The Missoula Plan continues to sit on the shelf while the FCC works on other business.

New Whitespace Device Results Presented to FCC: Microsoft and Philips presented new results from tests conducted in California and Texas showing no interference with terrestrial television signals. The FCC lab will review the results. Meanwhile, an order on TV white spaces will be pushed out past October. The NAB continues to heavily lobby against white space use and derided the new test results.

VoIP Providers Argue Against E-911 Location Standards: VoIP providers have filed comments at the FCC urging the FCC not to impose wireless-style E-911 location standards on VoIP. The providers argued that there is no technically feasible method for VoIP providers to automatically identify the customer's location. Vonage has suggested that the underlying network provider should be responsible for identifying 911 location for VoIP customers.

9.18.07 State Regulation and Legislation Update

California Considering State Broadband Fund: According to Jack Leutza, Communications Division Director at the California Public Utilities Commission, the CPUC is considering creating a broadband fund. The fund would create subsidies for providers to expand broadband into unserved areas.

New Hampshire PUC Considering Tough Conditions for Verizon/Fairpoint Deal: The New Hampshire Public Utilities Commission proposed eleven conditions on Verizon's $2.7 billion transfer to Fairpoint Communications. Among them are requirements for Verizon to assume some transition costs; impose buildout requirements on Fairpoint; bar local rate increases; continue all wholesale obligations currently applicable to Verizon for at least three years; and even require Fairpoint to appoint two New Hampshire representatives to the corporate board. The broadband buildout requirements would force Fairpoint to bring broadband to 75 percent of access lines in 18 months and 95 percent within 60 months. If the cost exceeded Fairpoint's planned $21.6 million expansion budget, Verizon would be required to cover the excess.

Nebraska Continues to Expand Regulatory Obligations on Non-Carriers: In the past six months, the Nebraska Public Service Commission has imposed regulatory obligations on non-carriers at a steady rate. The PSC imposed its state universal service fund on VoIP providers. It then imposed its state telecommunications relay service charge on VoIP providers. The PSC recently issued a "Communications Provider Registration Form" requiring VoIP providers and even ISPs to register with the PSC and pay a one-time fee of

Maryland Hits AT&T With Tax Penalty: The Maryland tax authorities have been auditing the books of telecommunications carriers in the past year. AT&T challenged a $5.2 million state assessment for its failure to pay tax on 900 services for 15 years. AT&T argued that it was exempt because it was a wholesale common carrier transport service. The tax authorities disagreed and were upheld by the court.

Tennessee Imposes 911 Service Charges on T1 and PRI Circuits: The Tennessee Attorney General's Office Issued an opinion regarding the proper calculation of 911 charge son T1s and PRIs. The opinion held that 911 charges apply to all digital channels in a T1 or PRI that are capable of carrying a voice call. So for a T1, up to 24 channels could each be subject to the fee, and 23 channels for a PRI.

9.17.07 FCC Regulation Update

FCC Reduces USF Factor: The FCC announced that the USF contribution factor will decrease from 11.3 percent to 11.0 percent.

TV Whitespaces Debate Heating Up Again: The National Association of Broadcasters has intensified its campaign opposing opening TV white space spectrum to unlicensed use. The revived campaign comes on the heels of the less than stellar test results on white space devices reported by the FCC last month. Wireless microphone users are also increasing their profile in the lobbying battle. During a brief session with reporters in the commission meeting room, Chairman Martin noted that he hoped to place a white spaces item on the FCC's next agenda and indicated that the FCC would continue to test new devices.

Qwest Files New Forbearance Petition: Facing potential defeat of its forbearance petition, Qwest withdrew its petition. Qwest was unhappy with the limited relief that commissioners proposed in a compromise. Qwest then filed another petition in the hope that more lobbying will result in the commission granting greater relief. Meanwhile, an omnibus "me too" forbearance order is being circulated to address the various pending ILEC broadband forbearance requests. Qwest's petition could be lumped into that decision. FCC Chairman Kevin Martin is circulating virtually the same broadband forbearance order that he dropped when he couldn't get three commissioner votes at last week's meeting. This new order appears to be scheduled to coincide with AT&T's pending petition that is due for an order by October 11.

FCC Approves Smaller Antennas in 11 GHz Band: The FCC granted a petition filed by FiberTower requesting authorization to use smaller antennas in the 11 GHz band. The band is primarily used for backhaul services.  Users of this spectrum share with satellite operators and must coordinate to mitigate interference.

WCA Asks that 77 BRS Licenses Be Re-Auctioned: Back in 1996 in Auction No. 6, the FCC auctioned licenses covering 493 basic trading areas in the 2.5 GHz range. 77 of those licenses were returned to the FCC when those winning bidders failed to pay. WCA argues that the FCC should immediately re-auction those licenses. Many of these licenses are in rural and underserved areas.

Verizon Wireless to Sue Over 700 MHz Auction Rules: Making good on a veiled threat to disrupt the 700 MHz auction, Verizon Wireless has filed an appeal of the FCC's order. 

9.14.07 Court Decisions Update

Portion of Patriot Act Ruled Unconstitutional: A federal court in New York enjoined the FBI from issuing "National Security Letters" ("NSLs") and enforcing "gag orders" preventing the targets from discussing the NSL contents. The government has 90 days to appeal.

Vonage and Sprint Patent Case Continues: In addition to the well-publicized Verizon v. Vonage patent case currently under appeal, Vonage is also fending off a patent lawsuit brought by Sprint Nextel. That case involves 19 claims brought by Sprint against Vonage alleging patent infringement. In this case, Vonage could benefit from recent Supreme Court rulings limiting the breadth of certain types of patents. Vonage is waiting on a ruling from the appellate court in the Verizon case.

Court Rules for Verizon in Northeast 271 UNE case: The 1st Circuit Court of Appeals held that the Maine and New Hampshire PUCs do not have the authority to set rates for Section 271 UNEs. The New Hampshire PUC attempted to set rates on UNEs delisted from 251 but still covered by 271 of the Telecom Act. Similarly, using a state law as the foundation, the Maine PUC sought to impose intrastate tariffing requirements on Verizon for Section 271 UNEs and prove that the rates were reasonable. The court found in favor of Verizon holding that the states may not impose pricing restrictions.

DSL Antitrust Case Continues on in California: Almost five years ago, a group of ISPs filed a lawsuit against then SBC (now AT&T) arguing that its provision of DSL to ISPs violated antitrust laws. AT&T attempted to use the Supreme Court's 2004 Trinko decision to eliminate the price squeeze allegations from the pending lawsuit. In a split ruling, the Ninth Circuit Court of Appeals held that Trinko does not eliminate the viability of price squeeze claims.

Sprint Settles for $30 Million to Settle USF Case: Sprint agreed to settle a lawsuit alleging that Sprint overcharged long distance consumers for universal service from 2001 through 2003. The complaint alleged that Sprint conspired with MCI, its main long distance competitor at the time, to charge and collect more than the federally-mandated USF quarterly contribution. AT&T is a defendant in this case as well, but has not agreed to a settlement.

9.13.07 Congress and Federal Activity Update

E-911 Bill: A House Telecommunications Subcommittee hearing on a proposed E911 bill was postponed to the 19th. HR-3403 was proposed by Rep. Bart Gordon (D-Tenn) on August 3rd. It would grant VoIP providers access to 911 networks at the same rates, terms and conditions currently provided to commercial mobile services providers. Theoretically then, a VoIP provider would be able to order trunks to local PSAPs (assuming that PSAP was accepting VoIP traffic). The bill would also mandate that all 911 fees collected by states actually be used for 911 or other emergency services.

DOJ Against Net Neutrality Regulation: The Department of Justice filed comments at the FCC opposing any potential FCC regulations limiting providers' ability to prioritize Internet traffic. DOJ warned that failure to allow providers to act on bandwidth demand issues would ultimately dissuade investments in network upgrades. Supporters of regulations of net neutrality argued that DOJ's comments ignore the market failure that has resulted in a broadband duopoly. The logic follows that without a fully competitive market, there is little to stop an area's duopoly providers from prioritizing traffic in a discriminatory fashion.

Internet Tax Moratorium Set to Expire: With the Internet Tax Moratorium set to expire in November, lobbying on both sides has increased steadily. Pro-moratorium lobbyists are pressing for a permanent extension of the act. State tax officials would prefer the moratorium be allowed to expire at best, or at worst, that any extension last no longer than four years. Senate Commerce Committee Vice Chairman Ted Stevens (R-Alaska) has called this issue the "most pressing broadband issue" currently before Congress.

Do Not Call List Permanent: Legislation is being drafted by Rep. Mike Doyle (D-Penn.) that would make permanent any consumer telephone number entry on the national Do Not Call list. Currently, numbers may be deleted after five years, meaning consumers who signed up in June 2003, could have their numbers scrubbed as early as next summer.

9.11.07 State Update

Maine- The Maine PUC detariffed all CLEC retail services as well as ILEC retail bundles and long distance. Because the ILECs still control over 75 percent of the state's local access lines, the PUC will continue require tariffing of ILEC local services.
California- The California PUC simplified the requirements for carriers making changes to services and rate plans. Most advice letters will now go into effect the same day as filed. This applies to promotional offers, changes to services, or introductions of new services. Advice letters may be protested up to 20 days after filing.
Illinois- A court upheld an Illinois Commerce Commission ruling requiring three rural ILECs to negotiate interconnection agreements with Sprint. The rural ILECs are Harrisonville Telephone; Marseilles Telephone; and Metamora Telephone. The IL CC had ruled that the ILECs must negotiate ICAs with Sprint even though Sprint intended to use the ICAs to provide wholesale VoIP services.  The ILECs argued that such services were not common carrier services so they should be protected from interconnection by the Telecom Act of 96's rural ILEC exemption. The court ruled in favor of the IL CC and Sprint. Sprint benefited from the FCC's decision last March overruling the South Carolina PSC and Nebraska PSC's attempts to shield rural ILECs from interconnection with Sprint.
Maryland- The Maryland PSC is investigating Verizon's allegedly rising rate of service quality complaints. According to the MPSC, customer complaints about slow outage repairs has increased 50 percent this year, and Verizon has missed 20 percent of repair appointments. The MPSC was not happy with the first batch of documents produced by Verizon in the investigation and demanded additional information. Verizon then provided additional documents in an attempt to satisfy the MPSC's data requests.
West Virginia- The West Virginia PSC squashed an attempt by Level 3 to raise its intrastate access charges. Level 3 tried to raise its rates from less than a penny/minute to 3.3 cents/minute. For justification, Level 3 argued that it was simply charging tariffed rates of other carriers. The WV PSC rejected the attempt finding that Level 3 was selectively mirroring the highest charge in the state, not charging a reasonable amount.

FCC Update 9-10-07

The Federal-State Joint Board on Universal Service issued a statement supporting the use of universal service funds for broadband. Chairman Martin, and Commissioners Copps and Tate serve on the joint board.

The FCC refused to grant M2Z's request for a (basically free) national license in the 2155-2175 MHz spectrum range. Instead, the FCC will open a formal rulemaking seeking comments on proposed uses of the spectrum. The spectrum could be sold at auction, or possibly opened to unlicensed use.

The FCC announced its agenda for its next meeting scheduled for September 11. On the agenda will be a
Memorandum Opinion and Order concerning requests for forbearance from Title II and Computer Inquiry requirements with respect to certain broadband services. This order will address the "me-too" forbearance requests filed by ILECs following Verizon's successful petition. 

Schedule

I'm going to try to update this site at least twice a week. Instead of just plowing through the day's news though, I'm going to post according to a scheduled category. I will categorize the post so when searching in the archive, readers can limit their searches on the proper category. Here's the schedule for now:

• First and third week of month- FCC Regulation and Congress/Federal Activity
• Second and fourth week of month- State Regulation/Legislation and Court Decisions

I'm going to try this for a while and see how it goes.

First Post

Hello again LoKT clients and friends. As many of you noticed, I ran into a few problems with the LoKT newsletter. It was very popular, but also very time consuming. As a practical matter too, sending out a monthly newsletter didn't transmit the full scope of information out that I thought was important. With the vast access to news and information that we all have now, the newsletter was also somewhat dated by the time it hit your inboxes. I struggled with coming up with a solution, and was resistant to the idea of a "blog." Maybe it's some sort of generational bias, but blogs seemed like a too-much-information-myspace sort of thing. Hardly the kind of place I wanted to update my clients and colleagues on what I thought was important about the telecom industry where we all are trying to make a living. But the more I though about it, the best way to accomplish my goals of keeping the information current and making it searchable on an archive basis was to host the information online somewhere. So, a blog it is. On this I will not be telling you what I had for breakfast or exhaustively detailing my opinions on the Boston Red Sox though. I hesitate to even call it a blog, as I expect the bulk of it will contain hard news/information. But I do intend to inject some of my opinions and a little analysis where it makes sense to do so. There may also be a little sarcasm or a nod to the unintended ironic humor that so often occurs in this industry. If I feel the need to go off on a rant, it will not be contained in the main section of the blog. There will be a separate page for that and some other categories that I'll develop over time. The idea of this blog is to provide information and be a resource for those working in the competitive telecommunications industry. If there's anything I can do to improve this blog, please let me know.